A：The highlights of ZTO Express's fourth quarter and fiscal year 2025 Financial Results include a 5% year-over-year growth in the express delivery industry's parcel volume, ZTO maintaining its industry-leading service quality with a 9.2% increase in parcel volume, and an expanded market share by 0.8 percentage points. Additionally, ZTO achieved an adjusted income of 2.69 billion and continued to lead the industry in scale and profitability.

A：The Chinese express delivery industry achieved a growth rate of 13.6% in the third quarter of 2025, with the volume reaching the 200 billion parcel milestone. ZTO maintained a steady market share year over year during the quarter.

A：In 2025, ZTO achieved an annual parcel volume of 38.5 billion, maintaining a steady market share year over year. ZTO stayed committed to high-quality development, enhanced differentiated product offerings, and service capabilities, actively responded to government calls, and successfully safeguarded competitive advantages in quality, scale, and profitability.

A：The priorities for ZTO Express in the next stage of its development are to uphold service quality to reinforce brand advantages, stay results-oriented while focusing on execution, integrate public and platform service indicators into performance evaluation, assign accountability, and continuously optimize the product mix to enhance service capability and differentiation to expand the brand. Secondly, ZTO will deepen efforts for cost reduction and operational efficiency to solidify cost leadership with better end-to-end integration, accelerate the implementation of the direct linkage model, establish benchmarks, assign cost reduction targets, and leverage fluctuation monitoring to unlock potential for optimal cost efficiency. Lastly, ZTO will continue to strengthen standardized operations and coordination across its transport segments to improve operational efficiency and service timeliness.

A：ZTO's long-term strategy is to integrate service quality, market share, and reasonable profit as the industry shifts from scale expansion to inclusive value. ZTO aims to prioritize both quantity and quality by expanding diversified and differentiated products, reinforcing infrastructure, harnessing digital operations productivity, reducing end-to-end costs, and prioritizing the long-term trust and stability of the franchising network.

A：Financial highlights for the fourth quarter include parcel volume growth of 9.2%, total revenue of 14.5 billion RMB, income from operations of 3.2 billion RMB, adjusted net income of 2.7 billion RMB, and an increase in the average service price (ASP) by 2.9% or 3 cents. For the full year, the highlights include parcel volume growth of 13.3%, total revenue of 49.1 billion RMB, income from operations of 10.5 billion RMB, adjusted net income of 9.5 billion RMB, and an increase in ASP by 1.7% or 3 cents.

A：Unit costs for core express delivery rose due to increased costs of sorting and transportation, offset partially by the productivity gains from economies of scale and ongoing initiatives. Gross profit declined due to a decrease in gross profit margin rate by 3.7 points to 25.4% for the quarter and 6 points to 25% for the year, influenced by volume incentives and lower average weight per parcel.

A：The new share buyback program authorized by the board is for up to $2.4 billion and will be effective through March 2028. In tandem with a semi-annual cash dividend of $3.90 per share, the enhanced shareholder return program reflects the company's commitment to optimize capital allocation and deliver consistent long-term value to shareholders.

A：China's express delivery industry has approached a scale of 200 billion in parcel volume by 2025, providing a substantial base for future growth. With the implementation of the antimonopoly policy, it is anticipated that growth will decelerate and the sector will transition from a volume-driven model to one focused on high-quality development. The industry is expected to experience a growth of 8% in 2026, as per the postal bureau's estimate, and ZTO has forecasted a growth between 10% to 13%. This suggests that the company will develop faster than the industry average, indicating a move towards higher quality and operational efficiencies.

A：The company prioritizes market share, profit, and network governance under the antimonopoly scheme. The allocation of the 200 million RMB fund to support frontline employees and network signals a commitment to reinforcing partnerships. This investment underscores the company's focus on quality over quantity, aiming for a steady and rational industry competitive order. The recent launch of the 200 million RMB Special Service Incentive Fund demonstrates the company's dedication to maintaining a fair and transparent network policy, ensuring a reasonable income level for franchise networks and frontline couriers. This initiative is designed to stimulate the network through profit mechanisms, building a win-win system, and expanding recognition of shared success while distributing interests among all stakeholders, including micro operators, which are crucial to the company's long-term success.

A：The shift in the industry from lower price volume chasing to value restoration is evidenced by the turnaround in average order value in early 2026. This fundamental change is driven by solid macroeconomic fundamentals and a deepening consensus against irrational price competition. The company believes that such price competition adds no incremental value to either e-commerce platforms or express delivery operators. The current market dynamics represent a structural competition shift from price-driven to quality-driven. This evolution is considered a solid foundation for sustainable price improvements across the industry, and the company remains committed to its tripod strategy, focusing on high-quality customer service. In 2025, the company's retail parcel volume surged 6%, and it plans to leverage its cost advantage and superior services to guide the industry through the quantity to quality cycle and create long-term value.

A：The company issued 1.5 billion US dollars of 5-year convertible bonds in February 2026, taking advantage of a low-cost financing tool during a period when the company's market value was under-assessed. The net proceeds of approximately 1.4 billion US dollars were intended solely for the company's share buyback. The objective was to enhance earnings per share, thereby improving shareholder value and protecting interests. The share buyback program is being executed efficiently, having completed a previous 600 million buyback, with an additional 800 million remaining. The company plans to complete the repurchase over the next year, taking into consideration market price fluctuations. The pace will be consistent, aiming to strengthen shareholder returns.

A：Although specific details on the major applications of AI within the company were not provided, the company acknowledges AI as a topic of interest among investors. However, the transcript does not offer further insights into the company's current or planned applications of AI technology.

A：ZTO has advanced its digital transformation and integrated AI technology across its express delivery chain to shift focus from experience-driven to data-driven. This has led to fundamental changes in operations, with an emphasis on reducing costs and increasing efficiency.

A：ZTO has implemented 3D digital twins and computed vision technologies in 25 super sorting centers, enabling remote monitoring and automatic anomaly alerts. This has resulted in a 60% reduction in missorting rates, improved operational precision, and significantly lowered labor costs.

A：ZTO is using in-house high-precision mapping data to apply AI in scenarios such as outlet site selection and delivery route planning. This has helped large-scale outlets reduce short-haul transportation costs by over 20% and has facilitated precise order allocation and intelligent dispatch for millions of peak retail parcel orders.

A：Large models at ZTO are transforming business operation structures by focusing on deep business analysis and high-precision business forecasting. This includes leveraging AI for data mining to uncover hidden patterns in complex data and introducing a general-purpose time-sensitive forecasting model that provides robust data support for operations and capacity planning.